Senate Republicans Release Revised Clarity Act Proposal
Commentary by Gage Raju-Salicki
Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis (R-WY), Senate Agriculture Chair John Boozman (R-AR), and Senate Banking Chair Tim Scott (R-SC) released a revised draft of the Digital Asset Market Clarity Act ahead of an upcoming floor vote.
The cloture motion on the legislation ripens September 15, 2026, at 2:15 p.m. If cloture is invoked on the motion to proceed, the new text would be offered as a substitute for the House-passed market structure bill regulating crypto and other digital assets.
The bill includes 126 changes requested by Democrats, according to a release from the three sponsors, and includes several additions, including ethics rules barring public officials from profiting off digital assets, temporary authority for the Treasury Secretary to limit stablecoin rewards if community banks start losing deposits, and protections for software developers, miners, and validators from being treated as money transmitters.
In reaction, New York Attorney General Letitia James and 17 other attorneys general sent a letter to the Senate Banking Committee urging a no vote unless the bill is changed further. They say the language meant to preserve state enforcement power is too vague and could be read to strip states of the ability to license crypto firms and pursue fraud. Citing the FBI's 2025 Internet Crime Report, the letter says that Americans reported $11.4 billion in crypto-related losses last year, up 22 percent, and that states have brought more than 330 crypto fraud cases since 2017, often when victims had nowhere else to turn.
Section 10111 of the Act says that nothing in the securities division stops states from enforcing their fraud and consumer protection laws, except where a state imposes a licensing or registration requirement the bill preempts. That exception is another sticking point for the attorneys general. A parallel provision, Section 20109, gives the CFTC exclusive jurisdiction over firms registered under the commodities division but leaves states free to pursue fraud.
Commentary
These updates to the Clarity Act are much narrower and more targeted when compared to prior updates to the bill’s text. It’s clear that the scope of issues has been identified, with both sides of the political aisle attempting to find common ground.
The more notable provisions proposed in this draft text are related to payment stablecoin yield and the Blockchain Regulatory Certainty Act (“BRCA”). Should this bill pass with these provisions as written, it will be interesting to see what metrics may emerge for the proposed Treasury Secretary power to restrict stablecoin rewards - and, moreover, what “deposit flight” may actually look like. On the BRCA front, this is perhaps the most significant change. Prior to this revision, the text of Clarity featured explicit protections against criminal liability under 18 U.S.C. § 1960, which has been a hot topic related to Roman Storm's criminal case. That being said, again, this text is closer than ever before to a final version, and the fact that the vast majority of the text’s sections remain unchanged (e.g., DeFi, self-custody, GENIUS-related modifications) suggests that there is a real desire to see Clarity through.
With the midterms looming large, there is a sense of crunch time for Clarity’s passage, though there may still be more negotiation to go: by way of a postscript on this update, it appears that Democrats have a counterproposal on the table.